1 ecommerce & distribution if you build it they will come?

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1 eCommerce & Distribution If you build it They will come?

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Page 1: 1 eCommerce & Distribution If you build it They will come?

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eCommerce & Distribution

If you build itThey will come?

Page 2: 1 eCommerce & Distribution If you build it They will come?

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eCommerceBig or Small

• Idea – Product or Service• Revenue Model• Financing• Infrastructure

– Hardware, software, people

• Sales, Traffic, etc.

Page 3: 1 eCommerce & Distribution If you build it They will come?

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Case Study

If you build itThey will come?

Page 4: 1 eCommerce & Distribution If you build it They will come?

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The Idea

• Provide warehousing & distribution services

• IT consulting

• Call center operations

Page 5: 1 eCommerce & Distribution If you build it They will come?

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Services – Distribution

• Fully automated warehouse– Individualized warehousing – shared infrastructure

• In by 8pm, delivered by 3pm• Automated inventory control

– Auto ordering– Auto trending

Page 6: 1 eCommerce & Distribution If you build it They will come?

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Services – IT Consulting

• Custom backend interfacing– Integration with ERP & legacy systems

• Credit card authorization

• Timely inventory/sales reports – 12 hours

Page 7: 1 eCommerce & Distribution If you build it They will come?

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Services – Customer Call Center

• Personalized 800 numbers

• Trained customer product reps

• 24/7 call support

Page 8: 1 eCommerce & Distribution If you build it They will come?

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The Revenue Model• Initial Consulting Services• Transactions: – pay as you go

– Call Center – per call charge– Distribution – per item shipped

• Shipping & Handling • Warehousing

– charge for slow moving items– Inventory turn - 6 times a year

• Marketing Information – resell trending & customer profiling

Page 9: 1 eCommerce & Distribution If you build it They will come?

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The Client

• Brick and Mortar Retailers

• Traditional Catalogers

• Internet Retailers

• Ideal – uniformed merchandize

Page 10: 1 eCommerce & Distribution If you build it They will come?

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Clients

Page 11: 1 eCommerce & Distribution If you build it They will come?

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Client's Costs & Returns

• Initial setup cost ± $1,000,000– Custom IT distribution– Call Center– Fully inventoried warehouse

• Returns – medium store

Page 12: 1 eCommerce & Distribution If you build it They will come?

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Venture Capital

Barksdale Partners

Silver Lake Partners

Page 13: 1 eCommerce & Distribution If you build it They will come?

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Venture Capital

• The Good– Cash Flow

• Ability to build infrastructure, hire people, market services and product – public relations

– Customer Contacts – networks – Experienced Managers

Page 14: 1 eCommerce & Distribution If you build it They will come?

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Venture Capital

• The Bad– Limits on control of company– Multiple management layers– Contacts – consultants

Page 15: 1 eCommerce & Distribution If you build it They will come?

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Venture Capital

• The Ugly– Demands on speedy returns 3 to 5 years– Founders forced out – Squeeze on work force to cut costs

Page 16: 1 eCommerce & Distribution If you build it They will come?

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What Happen?• Too Much Money – $400 Million

• Too big of an infrastructure: $100 million– Expensive warehousing, IT equipment

• Client’s sales expectations– Client’s reality – medium store in sales

• Services not split– Call centers +, IT consulting +, Distribution -

Page 17: 1 eCommerce & Distribution If you build it They will come?

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What Happen?• Limited balance sheet – burn rate: 500K

month

• Need for more money

• New clients scared of balance sheet – 6 months

• Reluctant to expand services – front end design work

Page 18: 1 eCommerce & Distribution If you build it They will come?

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Potential Clients

Page 19: 1 eCommerce & Distribution If you build it They will come?

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Competition

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Contact Information:Paul FrenkenPresidentColumbus Association of Internet Professionals [email protected]

www.colaip.org

Questions?